Daily Currency Update
GBP - British PoundBefore looking at the ECB rate decision today its worth looking where the pound lies at the moment. GBPUSD failed to break 1.40. Yesterday afternoon saw some action in the opposite direction as the currency pair dropped below 1.39. Perhaps the drop in COVID-19 related hospital admissions that we have seen to below 2,000 for the first time since September could be the spark the pound needs to move above GBPUSD 1.40.
Key Movers
For the ECB there isn't expected to be any change in terms of interest rates but what will be critical will be the outlook provided by the council, on whether there will be any change in its asset purchases programme as well any comments as to the state of the euro. Last time out the governing council did mention that they will keep an eye out for developments on the strength of the euro. There is always the risk to the central currency, that Lagarde mentions that the euro is too strong or its current levels are 'concerning' although this is perhaps unlikely at the current levels (EURUSD ~ 1.20). Either way it is something that can impact the currency and the detail will be in the language that Lagarde chooses to use, for example if she admits that the currency is too strong then we could see the currency pair EURUSD drop back towards 1.17.
Expected Ranges
- GBP/USD: 1.3850 - 1.4000 ▲
- GBP/EUR: 1.1480 - 1.1620 ▼
- GBP/AUD: 1.7960 - 1.8070 ▲
- EUR/USD: 1.1870 - 1.2100 ▲